Financial Markets and Trade Dynamics
Financial markets are experiencing ongoing fluctuations, with some Chinese property developers facing liquidation. Concerns over trade relations are also present, as shown by the US’s hesitation on tariffs and New Zealand Prime Minister Luxon’s remarks on US tariff relief.
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Based on the current date of August 11, 2025, we see clear signals for derivative traders in the coming weeks. The call for China to massively increase soybean orders is a direct catalyst for agricultural commodities. We have already seen soybean futures (ZS) climb over 8% in the past month, with CME Group data showing prices now holding above $17 per bushel, a level not consistently seen since mid-2024.
The persistent weakness in China’s economy, highlighted by the liquidation of yet another property developer, suggests caution on industrial metals. This trend continues what we saw in the early 2020s with firms like Evergrande, confirming a long-term structural issue impacting global demand. Copper prices have retreated to around $8,200 per tonne, and we believe shorting industrial commodities or related currencies like the Australian dollar remains a viable strategy.
Impact of Global Events on Energy and Technology
In the tech sector, reports of a 15% export tax on chip sales to China directly threaten revenues for key semiconductor companies. This has created headwinds for the Nasdaq 100, which has been volatile and is down nearly 3% this quarter. We feel that buying protective put options on the QQQ ETF is a sensible way to hedge against a broader tech sell-off if these tariffs become official policy.
Geopolitical risks are also rising, with tensions involving Iran and the ongoing war in Ukraine showing no signs of easing. This backdrop is keeping a floor under energy prices, with WTI crude holding firmly above $95 a barrel. Given the high probability of supply-related news shocks, we see value in long-dated call options on crude oil futures to capture potential price spikes.
